FT Online

Published:
2019-05-15 10:43:41 BdST

Pause in approval to new power plants likely


The government is likely to stop giving permission to set up new power plants for now, considering that the existing plants are enough to meet the demand for power until 2030.

A high-powered committee has recently recommended the pause in the approval process.

The committee stated that the existing power plants, including those under construction, are enough to meet the country's electricity demand over the next one decade.

The committee headed by state-run Power Cell Director General Mohammad Hossain revealed that the country's electricity demand would be around 29,619 megawatt (MW) by 2030 with the efficient use of energy.

On the other hand, the Power Division under the Ministry of Power, Energy and Mineral Resources (MPEMR) had projected the power demand at 40,000 MW by 2030.

Currently, the country's overall electricity generation from a total of 127 power plants is hovering around 11,500 MW against their de-rated generation capacity of 17,701 MW.

The government constituted the committee to assess the trend of the electricity demand and consumption scenario, as a substantial volume of electricity remained unused over the past several years and the authorities were counting capacity charge heavily.

Due to low demand, the government has been keeping idle more than one-third of the country's overall electricity generating capacity consistently despite the rise in mercury and comparatively higher demand in Ramadan.

"We have considered the current scenario in electricity consumption and assessed the growth prospects based on an efficient use of electricity," said Mr Hossain.

Justifying the committee report, he said, "If we continue awarding approval to new power plants, the volume of surplus electricity would be enormous, for which extra payment would also have to be made."

He, however, said the power plants which are under construction, have deals with stakeholders for implementation, or obtained letter of intent (LOIs) for implementation , would go ahead.

If all the power plants, now in the pipeline, come on line, some 30,000 MW of electricity would be available with the national grid by 2030, said officials.

However, power plants with 10,000MW generation capacity, now in operation, would retire by 2030, they added.

Top officials of different state-run power entities, including Bangladesh Power Development Board (BPDB), Dhaka Power Distribution Company Ltd (DPDC), and the Rural Electrification Board (REB), are members of the high-powered committee.

"We have already submitted the report to the Power Division," said Mr Hossain.

"Seeing lower- than- expected consumption of electricity in the country, we have already stopped awarding approvals to new power plants," BPDB Chairman Khaled Mahmood told the FE.

He said many power plants have already been asked to stop electricity generation to cope with the lower demand.

According to the Power Division, the country's installed power generation capacity was 4,942 MW in 2009.

The total power generation capacity, including that from the captive power plants, owned by industry owners, and renewable energy, has now reached 20,343 MW.

Over the past one decade, the installed power generation capacity increased notably, as a significant number of power plants, mostly oil-fired ones, were set up during the period.

Contracts on most of these power plants were awarded on the basis of unsolicited offers made taking advantage of the Speedy Supply of Power and Energy (Special Provision) Act,2010. The Act contains a provision for immunity to those involved in the quick-fix remedy.

The government also allowed private entrepreneurs to go for duty-free import of furnace oil to run their power plants at a service charge of 9.0 per cent along with import cost as an incentive.

When contacted, energy expert Professor Ijaz Hossain underscored the necessity of a sound and need-based projection of the country's electricity demand.

The government should properly estimate electricity demand taking into consideration the country's 'seasonal' and 'daily' barriers, he said.

Prof Hossain of Bangladesh University of Engineering and Technology (BUET) said over the past one decade the government awarded too many 'expensive' oil-fired power plants, which were not necessary.

Extending the tenures of such oil-fired power plants was also a 'wrong' decision on the part of the government, he said.

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